Normal Loss – NBC Institute

MI – Nov 2015 – L1 – SA – Q9 – Costing Methods

Calculates the quantity of good production after accounting for normal and abnormal losses.

Question

XYZ is a chemical processing company with 25,000kg input materials. The company has a normal loss of 10% and an abnormal loss of 750kg. What quantity of good production will be achieved in kg?
A. 24,250
B. 23,250
C. 22,500
D. 21,750
E. 20,750

Answer

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Tags: Abnormal Loss, Normal Loss, Process Costing
Level: Level 1

Topic: Costing Methods
Series: NOV 2015

MI – May 2022 – L1 – SA – Q2 – Costing Methods

Impact of ignoring equivalent units for normal loss in process costing.

Question

In process costing, ignoring equivalent units for normal loss has which of the following effects?

A. Decreases equivalent units and increases the cost per unit
B. Increases equivalent units and increases the total cost
C. Increases total cost and decreases the cost per unit
D. Increases the cost of work in progress and decreases the cost of finished products
E. Increases the cost of completed units and decreases work in progress

Answer

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Tags: Equivalent Units, Normal Loss, Process Costing
Level: Level 1

Topic: Costing Methods
Series: MAY 2022

MI – May 2021 – L1 – SA – Q6 – Costing Methods

Identify the concept not associated with process costing.

Question

Which of the following is NOT associated with process costing?

A. Normal loss
B. Abnormal loss
C. Abnormal gain
D. Equivalent units
E. Cost of goods sold

Answer

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Tags: Abnormal Loss, Costing, Normal Loss, Process Costing
Level: Level 1

Topic: Costing Methods
Series: MAY 2021

MI – May 2023 – L1 – SB – Q1 – Costing Methods

Preparation of Process 1 and Process 2 accounts, including the cost of goods produced and applicable abnormal loss or gain.

Question

A company manufactures a product which goes through two processes. The following are the extracts from the company’s records:

Process 1:

Materials: 10,000 units at the cost of ₦100,000
Labour: ₦20,000
Overheads: ₦20,000
Normal loss: 10%
Actual production: 8,500 units
Scrap sales: ₦5 per unit

Process 2:

Transfer from process 1: 8,500 units valued at ₦127,500
Labour: ₦15,000
Overheads: ₦10,000
Normal loss: 10%
Actual production: 8,400 units
Scrap sales: ₦3 per unit

Required:
a. Prepare Process 1 account. (10 Marks)
b. Prepare Process 2 account. (10 Marks)

(Show the calculations of cost of goods produced and applicable abnormal loss or gain.)

Answer

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Tags: Abnormal Loss, Normal Loss, Process Costing, Production Costs
Level: Level 1

Topic: Costing Methods
Series: MAY 2023

MI – May 2015 – L1 – SB – Q2 – Costing Methods

Prepare process accounts, normal loss account, and abnormal gain account for Maputo Nigeria Limited for Process 2 and Process 3.

Question

MAPUTO NIGERIA LIMITED manufactures its product through three processes. The following data relates to Process 2 and Process 3 for the month of October:

100,000 units at N10 each were transferred from Process 1 to Process 2.

Cost Components	Process 2 (N)	Process 3 (N)
Direct Materials	100,000	114,000
Direct Labour	135,000	100,000
Variable Expenses	30,000	53,500
Production Overhead	250,000	200,000

Normal output: 90% for Process 2 and 80% for Process 3
Actual output: 85,000 units for Process 2 and 70,000 units for Process 3
Scrap value of loss: N3 per unit for Process 2 and N2 per unit for Process 3

Required:
a. Prepare Process 2 and Process 3 accounts (16 Marks)
b. Prepare the Normal Loss account (2 Marks)
c. Prepare the Abnormal Gain account (2 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Abnormal Gain, Manufacturing Costs, Normal Loss, Process Costing, scrap value
Level: Level 1

Topic: Process Costing
Series: MAY 2015

MI – Nov 2015 – L1 – SA – Q9 – Costing Methods

Calculates the quantity of good production after accounting for normal and abnormal losses.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Abnormal Loss, Normal Loss, Process Costing
Level: Level 1

Topic: Costing Methods
Series: NOV 2015

MI – May 2022 – L1 – SA – Q2 – Costing Methods

Impact of ignoring equivalent units for normal loss in process costing.

Question

In process costing, ignoring equivalent units for normal loss has which of the following effects?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Equivalent Units, Normal Loss, Process Costing
Level: Level 1

Topic: Costing Methods
Series: MAY 2022

MI – May 2021 – L1 – SA – Q6 – Costing Methods

Identify the concept not associated with process costing.

Question

Which of the following is NOT associated with process costing?

A. Normal loss
B. Abnormal loss
C. Abnormal gain
D. Equivalent units
E. Cost of goods sold

Answer

Find Related Questions by Tags, levels, etc.

Tags: Abnormal Loss, Costing, Normal Loss, Process Costing
Level: Level 1

Topic: Costing Methods
Series: MAY 2021

MI – May 2023 – L1 – SB – Q1 – Costing Methods

Preparation of Process 1 and Process 2 accounts, including the cost of goods produced and applicable abnormal loss or gain.

Question

A company manufactures a product which goes through two processes. The following are the extracts from the company’s records:

Process 1:

Materials: 10,000 units at the cost of ₦100,000
Labour: ₦20,000
Overheads: ₦20,000
Normal loss: 10%
Actual production: 8,500 units
Scrap sales: ₦5 per unit

Process 2:

Transfer from process 1: 8,500 units valued at ₦127,500
Labour: ₦15,000
Overheads: ₦10,000
Normal loss: 10%
Actual production: 8,400 units
Scrap sales: ₦3 per unit

Required:
a. Prepare Process 1 account. (10 Marks)
b. Prepare Process 2 account. (10 Marks)

(Show the calculations of cost of goods produced and applicable abnormal loss or gain.)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Abnormal Loss, Normal Loss, Process Costing, Production Costs
Level: Level 1

Topic: Costing Methods
Series: MAY 2023

MI – May 2015 – L1 – SB – Q2 – Costing Methods

Prepare process accounts, normal loss account, and abnormal gain account for Maputo Nigeria Limited for Process 2 and Process 3.

Question

MAPUTO NIGERIA LIMITED manufactures its product through three processes. The following data relates to Process 2 and Process 3 for the month of October:

100,000 units at N10 each were transferred from Process 1 to Process 2.

Cost Components	Process 2 (N)	Process 3 (N)
Direct Materials	100,000	114,000
Direct Labour	135,000	100,000
Variable Expenses	30,000	53,500
Production Overhead	250,000	200,000

Normal output: 90% for Process 2 and 80% for Process 3
Actual output: 85,000 units for Process 2 and 70,000 units for Process 3
Scrap value of loss: N3 per unit for Process 2 and N2 per unit for Process 3

Required:
a. Prepare Process 2 and Process 3 accounts (16 Marks)
b. Prepare the Normal Loss account (2 Marks)
c. Prepare the Abnormal Gain account (2 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Abnormal Gain, Manufacturing Costs, Normal Loss, Process Costing, scrap value
Level: Level 1

Topic: Process Costing
Series: MAY 2015

Question Tag: Normal Loss

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MI – Nov 2015 – L1 – SA – Q9 – Costing Methods

Calculates the quantity of good production after accounting for normal and abnormal losses.

MI – May 2022 – L1 – SA – Q2 – Costing Methods

Impact of ignoring equivalent units for normal loss in process costing.

MI – May 2021 – L1 – SA – Q6 – Costing Methods

Identify the concept not associated with process costing.

MI – May 2023 – L1 – SB – Q1 – Costing Methods

Preparation of Process 1 and Process 2 accounts, including the cost of goods produced and applicable abnormal loss or gain.

MI – May 2015 – L1 – SB – Q2 – Costing Methods

Prepare process accounts, normal loss account, and abnormal gain account for Maputo Nigeria Limited for Process 2 and Process 3.

MI – Nov 2015 – L1 – SA – Q9 – Costing Methods

Calculates the quantity of good production after accounting for normal and abnormal losses.

MI – May 2022 – L1 – SA – Q2 – Costing Methods

Impact of ignoring equivalent units for normal loss in process costing.

MI – May 2021 – L1 – SA – Q6 – Costing Methods

Identify the concept not associated with process costing.

MI – May 2023 – L1 – SB – Q1 – Costing Methods

Preparation of Process 1 and Process 2 accounts, including the cost of goods produced and applicable abnormal loss or gain.

MI – May 2015 – L1 – SB – Q2 – Costing Methods

Prepare process accounts, normal loss account, and abnormal gain account for Maputo Nigeria Limited for Process 2 and Process 3.

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MI – Nov 2015 – L1 – SA – Q9 – Costing Methods

Calculates the quantity of good production after accounting for normal and abnormal losses.

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MI – May 2022 – L1 – SA – Q2 – Costing Methods

Impact of ignoring equivalent units for normal loss in process costing.

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MI – May 2021 – L1 – SA – Q6 – Costing Methods

Identify the concept not associated with process costing.

You're reporting an error for "MI – May 2021 – L1 – SA – Q6 – Costing Methods"

MI – May 2023 – L1 – SB – Q1 – Costing Methods

Preparation of Process 1 and Process 2 accounts, including the cost of goods produced and applicable abnormal loss or gain.

You're reporting an error for "MI – May 2023 – L1 – SB – Q1 – Costing Methods"

MI – May 2015 – L1 – SB – Q2 – Costing Methods

Prepare process accounts, normal loss account, and abnormal gain account for Maputo Nigeria Limited for Process 2 and Process 3.

You're reporting an error for "MI – May 2015 – L1 – SB – Q2 – Costing Methods"

MI – Nov 2015 – L1 – SA – Q9 – Costing Methods

Calculates the quantity of good production after accounting for normal and abnormal losses.

You're reporting an error for "MI – Nov 2015 – L1 – SA – Q9 – Costing Methods"

MI – May 2022 – L1 – SA – Q2 – Costing Methods

Impact of ignoring equivalent units for normal loss in process costing.

You're reporting an error for "MI – May 2022 – L1 – SA – Q2 – Costing Methods"

MI – May 2021 – L1 – SA – Q6 – Costing Methods

Identify the concept not associated with process costing.

You're reporting an error for "MI – May 2021 – L1 – SA – Q6 – Costing Methods"

MI – May 2023 – L1 – SB – Q1 – Costing Methods

Preparation of Process 1 and Process 2 accounts, including the cost of goods produced and applicable abnormal loss or gain.

You're reporting an error for "MI – May 2023 – L1 – SB – Q1 – Costing Methods"

MI – May 2015 – L1 – SB – Q2 – Costing Methods

Prepare process accounts, normal loss account, and abnormal gain account for Maputo Nigeria Limited for Process 2 and Process 3.

You're reporting an error for "MI – May 2015 – L1 – SB – Q2 – Costing Methods"

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